Weak Europe sales, rising costs to hurt Align Tech Q1

(Reuters) - Align Technology (ALGN.O) forecast a first quarter below Wall Street estimates as it sees weak sales of its trademark invisible braces in Europe, wiping the gloss off better-than-expected results in its latest reported quarter.

The weak outlook sent Align Tech shares sliding 6 percent to $23.85 in after-market trading on Monday. They had closed at $25.38 on the Nasdaq.

While the company benefited from lower-than-projected operating costs in the fourth quarter, higher advertising will drive up expenses in the current quarter.

A shift in certain operations from New Jersey to Juarez and Costa Rica will also push up costs in the current quarter.

Align Tech's shares have risen more than 30 percent since last September, when it shut down its New Jersey unit to control operating costs.

The company has now either met or exceeded Wall Street profit estimates for the fourth straight quarter as it gained from strong sales of Invisalign, a series of nearly invisible, teeth aligners that are an alternative to traditional metal braces.

However, Chief Financial Officer Ken Arola expects the number of Invisalign cases sold to decline to 82,500-84,000 in the first quarter, from 86,000 in the fourth quarter.

Invisalign sales rose 28 percent to $118.9 million and contributed more than 90 percent to overall revenue in the fourth quarter.

The first system received U.S. FDA clearance in 1998 and the company has added a range of dental devices to its Invisalign portfolio since.

WEAK OUTLOOK VS STRONG Q4

San Jose, California-based Align Tech projected first-quarter adjusted earnings of 19 cents to 21 cents per share, on revenue of $125.4 million to $127.9 million.

Analysts on average were expecting earnings of 22 cents per share on revenue of $129.10 million, according to Thomson Reuters I/B/E/S.

For the quarter ended December 30, Align Tech posted a net profit of $20.4 million, or 25 cents per share, compared with $9.9 million, or 13 cents per share, a year ago.

Excluding one-offs, the company earned 28 cents per share.

Revenue rose 39 percent to $128.9 million.

Analysts were expecting earnings of 22 cents per share, on revenue of $127.7 million.

Earlier in the day, Jefferies had raised its price target on the company's stock to $30 from $23.

The brokerage had reiterated its "buy" rating on the stocks of Align Tech and two of its U.S. rivals Dentsply International Inc (XRAY.O) and Sirona Dental Systems (SIRO.O), citing a favorable outlook for dental product makers.

Dentsply is slated to post its fourth-quarter results on February 16, while Sirona will report its first-quarter earnings on February 3. (Reporting by Zeba Siddiqui in Bangalore; Editing by Viraj Nair)